TARGET ENERGY LIMITED 
By
WEST PERTH, AUSTRALIA--(Marketwired - Jan 30, 2014) - US-focused oil and gas producer Target Energy Limited ("Target") (
- Sydney #2 drilled and presently being completed
- Wagga Wagga #1 completion to follow
- Extreme winter weather in Permian Basin affects production
1. Operations
Permian Basin, Texas
1.1. Fairway Project - Howard & Glasscock Counties (Target 45%-60% WI)
1.1.1. Drilling
Sydney #2 (Target 60% WI)
Sydney #2 is located approximately 800 metres east of Sydney #1 and targeted both the Wolfberry and Fusselman sections. Drilling operations commenced on 26 November 2013, with the well reaching a Total Depth of 3,040.4m (9,975 ft) on 7 December 2013. Good shows were encountered while drilling and subsequent wireline log analysis indicated potential pay in the target intervals. The Fusselman Formation was intersected 13 metres (42 feet) updip to that of the nearby Sydney #1 oil well.
At the time of writing, completion operations were underway at Sydney #2, with a preliminary flow test yielding an oil flow rate of 75 BO in 19.5 hrs (equivalent to 92 BOPD). The oil was accompanied by a large amount of water (approx. 800 BW), which appears to be flowing from vertically extensive fractures. Work is underway to minimise the water flow.
| Well Reporting Summary | |
| Name and Type of Well | Sydney #2, Step Out/Appraisal (Oil) |
| Well Location | Glasscock Co, Texas |
| Permit | NW/4 & E/2 S 188 Block 29 A‐170 W&NW Survey |
| TEX Working Interest | 60% |
| Geological Rock Type | Fusselman Carbonate |
| Depth of Zones Tested | 3040m |
| Type of Tests Undertaken | Preliminary Flow testing |
| Duration of Tests Undertaken | 19.5 hours |
| Hydrocarbon Phases Recovered | 75 Barrels of Oil (8.6%) |
| Other recovery | 800 Barrels of Formation Water (91.4%) |
| Choke Size Used | Open |
| Flow Rates | 92 BOPD |
| Number of Fracture Stimulations | Nil |
| Material Volumes of Non-Hydrocarbon Gases | Nil |
Wagga Wagga #1 (Target 45% WI)
Wagga Wagga #1 is located 8.5 km (5.3 miles) south east of the Sydney #1 well (Fig 1) and targeted the Ellenburger, Fusselman and Wolfberry sections. Operations commenced on 14 October 2013, with the well encountering good oil and gas shows while drilling and reaching a Total Depth of 3,057m (10,030 ft) on 27 October 2013. Subsequent wireline log analysis indicated potential pay in the Ellenburger and Fusselman/Devonian sections as well as within the Wolfberry interval. The Ellenburger and Fusselman zones will be tested and produced prior to completing the well in the Wolfberry section. A completion rig is expected to be on site in the last week of January 2014.
1.1.2. Forward Program
2014 Drilling Program
A further nine wells are planned to be drilled in the Fairway Project including new wells on the Company's BOA, Ballarat, Bunbury and Taree lease-holdings.
Louisiana
1.2. East Chalkley (Target Energy 35% WI)
The East Chalkley project is an oil field appraisal and development program, approximately 33 kilometres (20 miles) southeast of the town of Lake Charles in Cameron Parish, Louisiana. The oil accumulation, on the east flank of the Chalkley Field, is a previously unidentified down-dip oil leg associated with the gas field.
1.2.1.Drilling
Pine Pasture #3 (Target Energy 35% WI)
Pine Pasture #3 was drilled in June 2013 to a depth of 3,011.5m (9,880 ft) as a development well, with wireline logs confirming the presence of approximately 8 metres of potential net pay in the Alliance W2 sands at a depth of 2,947m (9670 ft), similar to - and 8 metres updip from - the Pine Pasture #2 oil well. The well was subsequently cased for production and completed and brought on-line on 7 October 2013.
Production has been restricted by problems associated with the down‐hole pump assembly -- initially as a consequence of the pump frequently shutting itself down. Subsequent re-programming has largely eliminated this issue, but overall production volumes from Pine Pasture #3 remain low (average in December: 8 BOPD / 30 mcfg / 84 BWPD), potentially as a result of a down-hole blockage, in turn probably a consequence of the initial pump issues. The partners are presently analysing pump and well performance data ahead of implementing a remediation program.
2. Current Indicative Drilling Schedule
| Estimated Timing* | Prospect | Location | Target Working Interest (WI) | |||
| Completion Imminent | Wagga Wagga #1 | Howard Co, Tx | 45% | |||
| Completion Underway | Sydney #2 | Glasscock Co, Tx | 60% | |||
| Q1 2014 | BOA North #3 / BOA North #4 | Howard Co, Tx | 60% | |||
| Q2 2014 | Ballarat #1 / Wagga Wagga #2 | Glasscock Co | 60-45% | |||
| Q3 2014 | Bunbury #1 / Taree #1 / BOA North #5 | Howard / Glasscock Co | 60% | |||
| Q4 2014 | Darwin #4 / Ballarat #2 | Howard / Glasscock Co | 60% | |||
*Timing indicative only - actual order, timing and well selection will vary.
3. Production (1 Oct - 31 Dec)
| Project | TEX WI | Gross Gas Prodn in Period (mmcf) | Cumulative Gross Gas Prodn (mmcf) | Net Gas Prodn in Period (mmcf) | Cumulative Net Gas Prodn (mmcf) | Gross Oil Prodn in period (BO) | Cumulative Gross Oil Prodn (BO) | Net Oil Prodn in Period (BO) | Cumulative Net Oil Prodn (BO) | |||||||||
| Section 28 | 25% | 32.8 | 2,342.1 | 8.2 | 585.5 | 423 | 90,768.0 | 106 | 22,692 | |||||||||
| East Chalkley | 35% | 10.4 | 53.4 | 3.6 | 18.7 | 3,834 | 111,771.5 | 1,342 | 39,120 | |||||||||
| Merta | 25% | 10.7 | 387.0 | 2.7 | 96.8 | 8 | 5,052.7 | 2 | 1,263 | |||||||||
| Fairway+ | 60% | 25.2 | 110.3 | 15.1 | 66.2 | 10,672 | 71,974.9 | 6,403 | 43,185 | |||||||||
| Total | 79.1 | 2,892.8 | 29.6 | 767.2 | 14,936.6 | 279,567.1 | 7,852.7 | 106,260.1 | ||||||||||
Net Production is scaled to Target's Working Interest, before royalties; mmcf = million of cubic feet; mmcfgd = million cubic feet of gas per day; BO = barrels of oil, BOPD = barrels of oil per day, BOEPD = barrels of oil equivalent per day (Target reports a thermal equivalent when combining gas and oil production, where 1BOE = 6 mcf).
+Permian Basin production was adversely affected by extreme weather in the region from late November 2013 through to early January 2014.
4. Lease Holdings
| Project | Lease / Unit | Basin | Description | Depth Limits | TEX WI | Royalty | Gross Acres | Net Acres | ||||||||||
| Fairway | ||||||||||||||||||
| BOA | Permian | S12, Block 33, T-2S, A-1353; T&P RR Co Survey, Howard Co | None | 60 | % | 25 | % | 640.0 | 384.0 | |||||||||
| Darwin | Permian | S44, Block 33, T-1S, A-1292; T&P RR Co Survey, Howard Co | None | 60 | % | 25 | % | 640.0 | 384.0 | |||||||||
| Bunbury | Permian | S102 A-1405; S103 A-1405; S104 A-1495; Bl 29 W&NW RR Co, Howard Co | None | 60 | % | 25 | % | 918.0 | 550.8 | |||||||||
| Ballarat | Permian | S 184 & 185, Bl 28, A-815 & A-A483; W&NW RR Survey, Glasscock Co | None | 60 | % | 25 | % | 355.7 | 213.4 | |||||||||
| Taree | Permian | S193, Bl 28, A-815 and A-A483; W&NW RR Co Survey, Glasscock Co | None | 60 | % | 25 | % | 320.0 | 192.0 | |||||||||
| Sydney | Permian | S188 Block 29 A-170; W&NW RR Co Survey, Glasscock Co | None | 60 | % | 25 | % | 480.0 | 288.0 | |||||||||
| Unnamed | Permian | S4, Block 32, T-2-S, A-1354; T & P RR Co Survey, Howard Co | None | 60 | % | 25 | % | 610.0 | 366.0 | |||||||||
| Unnamed | Permian | S24, Bl 35 A-1538; S26 Bl 35 A-1415; T&P RR Co Survey, Howard Co | None | 60 | % | 25 | % | 260.0 | 156.0 | |||||||||
| Wagga Wagga | Permian | S221, Block 29, A-496; W&NW RR Co Survey, Glasscock Co | None | 45 | % | 25 | % | 305.0 | 137.3 | |||||||||
| Merta | ||||||||||||||||||
| Merta No. 1 Well Gas Unit No. 2 | Gulf Coast | S3 A-219 International and Great Northern RR Co Survey, Wharton Co | 7,650 ft - 7,880 ft | 25 | % | 25.7 | % | 303.0 | 75.7 | |||||||||
| Section 28 | ||||||||||||||||||
| SML #A-1, A-3 Unit | Gulf Coast | St Martin Ph | None | 25 | % | 28 | % | 40.0 | 10.0 | |||||||||
| SML #A-2 Unit | Gulf Coast | St Martin Ph | None | 25 | % | 28 | % | 40.0 | 10.0 | |||||||||
| E Chalkley | ||||||||||||||||||
| Unit Agreement: CK W RA SU | Gulf Coast | S11, 13, 14 &15, T12S-R6W, Cameron Ph | 8,000 ft - 10,000 ft | 35 | % | 30.5 | % | 714.9 | 250.2 | |||||||||
| Total | 5626 | 3017 | ||||||||||||||||
There were no changes in Target's lease-holdings during the reporting period.
Laurence Roe
Managing Director
NOTE: In accordance with ASX Listing Rules, any hydrocarbon reserves and/or drilling update information in this report has been reviewed and signed off by Mr Laurence Roe, B Sc, Managing Director of Target Energy Limited, who is a member of the Society of Exploration Geophysicists and has over 30 years experience in the sector. He consents to the reporting of that information in the form and context in which it appears.
